Hybrid car exports top agenda as EU envoy reaches Beijing

Hybrid car exports top the agenda as EU trade chief Maros Sefcovic opens two days of talks in Beijing aimed at heading off a trade war with China.

Sefcovic arrived on Thursday for the second meeting of the EU-China Trade and Investment Council. He will chair it alongside Chinese Commerce Minister Wang Wentao, and negotiations could run late into Friday.

Brussels wants results it can show before EU leaders meet next Thursday, when China will feature high on their agenda. Officials describe the goal as “tangible, meaningful and measurable” progress.

What Brussels wants from Beijing

At the heart of the plan sits a pilot deal covering a single sector, most likely cars. A successful test could then be widened to chemicals, plastics and further industrial products. In particular, Brussels wants China to cap its hybrid car exports voluntarily.

However, the EU has warned that failure could bring safeguard measures, including quotas. Beijing has rejected voluntary export limits before and strongly opposes import quotas. Its foreign ministry said on Tuesday that the supply chains of the two economies were “highly integrated and mutually beneficial,” and urged the EU to settle concerns through dialogue.

The trade gap drives much of the pressure. According to EU figures, the bloc ran a deficit with China of about 360 billion euros in 2025, while Chinese data put it lower, at around $292 billion. The shortfall now grows by roughly one billion euros every day.

Sefcovic has set three priorities. First, he wants to tackle surging imports in strategic sectors. Second, he hopes to raise European sales to China. Third, he seeks steadier access to critical raw materials, including clear export licences for rare earths.

Hybrid car exports surge

The EU began charging anti-subsidy duties on fully electric Chinese cars in October 2024. Plug-in hybrids, however, escaped those duties. Shipments of Chinese hybrids then soared, reaching 50,000 vehicles in July 2026 compared with about 3,800 in October 2024. That surge in hybrid car exports has squeezed European carmakers.

Meanwhile, France and Germany are pushing Brussels for a new fast-response trade tool. French President Emmanuel Macron and German Chancellor Friedrich Merz, writing jointly, cautioned that a “massive industrial shock” threatened key industries such as cars, aerospace, pharmaceuticals and machine tools. Under their idea, Brussels could restrict entry to the single market for any country it judges to be undermining fair competition.

Analysts expect little from the Beijing meeting. Penny Naas of the German Marshall Fund said there may be “a few crumbs” from Beijing. However, she said: “I would not expect any kind of major breakthrough.” Zhu Tian, an economics professor at the China Europe International Business School in Shanghai, said the talks could produce agreements “on some specific issues.”

Andrew Small of the European Council on Foreign Relations said the talks would test whether China puts serious offers on the table. He warned that Beijing might try to draw Europe into a process trap that offers just enough to delay action.

Relations remain tense. Talks on the trade imbalance began in June, and China has threatened to retaliate against new EU measures. Meanwhile, the Commission is still working on new tools to protect key industries, with proposals due before EU leaders in December.